State-owned Petronas offered to pay Progress shareholders
C$20.45 a share, 77 percent more than the company’s closing
share price yesterday in Toronto in a deal valued at about C$5.5
billion, including debentures.

“It’s really ignited interest in the natural-gas space,”
Eric Nuttall, who manages C$90 million at Toronto-based Sprott
Inc.’s Energy Fund, said today in a telephone interview. “It’s
a natural tendency post-large announcement to play the ‘who’s
next’ game.”

“Natural gas has been under a great deal of pressure as
the gas price has been hitting new lows,” Rick Hutcheon,
president of Toronto-based RKH Financial, said in a phone
interview. “That has spooked a lot of investors and it’s forced
the valuations down to levels that a number of offshore foreign
energy companies are going to look at and think, ‘Boy, these
things are pretty cheap and maybe it’s not a bad idea to pick up
some of these things now.’”

Natural gas prices dropped in New York after the U.S.
Energy Department said U.S. stockpiles increased. The commodity
fell 2.7 percent to $2.722 per million British thermal units on
the New York Mercantile Exchange. The futures are down 8.9
percent this year.